Redfin’s 2026 Housing Predictions
The U.S. housing market is expected to begin a gradual, multi-year recovery in 2026 as homebuying becomes slightly more attainable. Economists anticipate what they call the Great Housing Reset: a slow normalization marked by modest price growth, lower mortgage rates and incomes finally rising faster than home prices for the first time since the post–Great Recession period. Mortgage rates are projected to average about 6.3%, easing from 2025 levels and offering some relief, though not returning to pandemic-era lows. As a result, home sales are expected to inch up about 3%, while affordability improves just enough to bring a portion of buyers back into the market. Still, high costs will keep many younger households renting longer or living in shared or multigenerational arrangements.
According to Redfin News, “A weaker labor market will lead the Fed to cut interest rates in 2026 and bring monetary policy to a more neutral place, which should keep mortgage rates in the low-6% range. But lingering inflation risk and the likelihood that we’ll avoid a recession will keep the Fed from cutting more than the markets have already priced in.”
